A promising rise in hiring contractors requests in UK

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Published: 05 June 2014

A new report published in May has revealed much in the way of good news for contractors. The Jobs Outlook Report from the REC has found that half (50%) of UK employers who regularly employ contractors plan to increase their recruitment over the next three months - a rise of 2 points on last month's total.

And the good news doesn't end there. According to the report, demand and rates of pay for contractors are also on the up and both are set to continue along their upward trajectory for the foreseeable future – a trend that started at the turn of the year.

The report found that billings for temporary contractors grew at a 'robust' pace over the last few months – matched by an equally impressive increase in overall contractor pay month-on-month.

In addition to this, three-quarters of employers stated that they intend to increase the permanent staffing levels over the same period, with 81% stating they will do so within the next 4 to 12 months – up from just 22% in Q1 of 2014.

Indeed, the REC report stated that a strong start to 2014 has prompted a rise in recruitment intentions for the year ahead as employers seek to increase the number of both permanent and temporary/contracting staff in order to meet current and anticipated demand.

However, an air of caution seems to prevail. Whilst the report found that 80% of employers plan to hire more staff over the coming three months, 1 in 5 (20%) of employers revealed growing concerns about skills shortages. Furthermore, as many as 25% of employers go one step further and state that they anticipate appreciable shortages over the next 12 months, which could become a barrier to further growth.

So what does this mean for contractors?

Simply put, a lack of suitably skilled labour for permanent positions will fuel growth in demand among the contract worker community. Contractors will increasingly be used as a means to provide employers with the much-needed skills they need on a short-term basis – particularly within the engineering, logistics and IT sectors.

Kevin Green, chief executive of the REC, commented:

“The labour market is becoming more candidate-led and it is vital that businesses look at their hiring processes to ensure that they are fit for purpose and can attract the candidates they are looking to hire. However, skills and talent shortages could jeopardise the recovery...with thousands of employers not able to find the skills and talent they need to meet increasing demand.

“The number of candidates available to fill both temporary and permanent jobs is falling at its fastest rate in a decade. In response to this employers are bumping up starting salaries to entice the workers they need to join them.”

Mike Keeling, sales director of One Click Umbrella, added: “With demand for contractors set to grow, it is even more imperative that recruiters work with the right Umbrella Company. Sometimes choosing who to partner with comes down to the personal touch.

“All too often we speak with recruiters who feel like they have been passed from pillar to post by their previous Umbrella Company – we don't work like that. After all, UK employment legislation is complicated enough without any added frustration caused by poor customer service or the omission of a dedicated account manager or service level agreements.”

There are currently 1.72 million contractors operating in the UK today, and as the economy continues to recover and grow from strength to strength, their contribution to the economy will become increasingly important.

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